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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Date: March 20 2002
0, ,.. , ,", ' . , ~
'1\ I \.. II 'itiL
Subject:. AUTHORIZE AMENDMENT OF
THE FY 2001-2002 BUDGET TO
APPROPRIATE $12,300 FROM THE
UNDESIGNATED I UNRESERVED
GENERAL FUND BALANCE TO FUND
THE LIBRARY LEASE COST FOR THE
DOROTHY INGHRAM BRANCH
LIBRARY.
From: Ophelia Georgiev Roop, Director
Dept: Library
MlCC Meeting Date April 1 , 2002
Synopsis of Previous Council Action:
Recommended Motion:
Authorize the Director of Finance to amend FY 2001-2002 Adopted Budget and appropriate
$12,300 from the undesignatedlunreserved General Fund balance to fund the Library lease costs
for the Dorothy Inghram Branch Library (account number 105-471-5505).
@,C~
Signature
Contact person: Ophpl1~ npnrgipv J)nnp
ptann... "ISl1-ll? 1 0
Supporting data attached: Staff Report,
Ward: Ii
FUNDING REQUIREMENTS: Amount: $ 12,300
Source: (Acct. No.) 105-471-5505
(Acct. Description) General Fund
Finance:~~~",,--
Council Notes:
Agenda Item No. ~
~ j, /()~
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL
ACTION
Staff Report
Subject: Authorize the Director of Finance to amend Fiscal Year 2001-2002 adopted
budget and appropriate $12,300 from the undesignatedlunreserved General Fund balance
to fund the Library lease cost for the Dorothy Inghram Branch Library. (account number
105-471-5505)
Background:
The "Public Enterprise Building" (a former EDA property) located at 1505 West
Highland Avenue was sold to New Hope Missionary Baptist Church in January 2002. In
mid-February, staff received the attached lease agreement, which requires the Library
Board of Trustees to pay the church a monthly rent of $3,058.30, commencing March I,
2002 and ending on June 30, 2002.
According to the information provided by New Hope Missionary Baptist Church the
Library is being charged for 3,000 sq. feet of useable space and the Parks and Recreation
Department is being charged for 4,909 sq. feet of useable space. However, both
departments will be charged a monthly rent of $3,058.30, meaning that the Library will
be paying a higher cost per square foot. The Library's cost equates to $1.01 per square
foot.
This location is the site of the Dorothy Inghram Branch Library, which serves the citizens
of San Bernardino in the 6th Ward and has been located there since 1977. The building
will be open to the public during the following hours:
Monday through Wednesday 10:00 a.m. to 8:00 p.m.
Thursday through Saturday 10:00 a.m. to 6:00 p.m.
Custodian service for the restrooms will only be available Monday through Friday by
New Hope Missionary Baptist Church.
Building security service will be provided during all library hours by New Hope
Missionary Baptist Church.
In order to fund this unanticipated cost for the balance of the year, it is recommended to
appropriate $12,300 from the undesignatedlunreserved General Fund balance to cover
these expenses through the current fiscal year.
Financial Impact:
$12,300 from the undesignatedlunreserved General Fund balance.
At this time, the Library has no plans to relocate. Projected cost for fiscal year 2002-
2003 will be $36,700 annually.
Recommendation:
Authorize the Director of Finance to amend the FY 2001-2002 Adopted Budget and
appropriate $12,300 from the undesignatedlunreserved General Fund balance to fund the
Library's lease costs for the Dorothy Inghram Branch Library (account number 105-471-
5505).
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STANDARD MULTI-TENANT OFFICE LEASE - GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Basic provisions ("Basic Provisions"').
1.1 Parties: This Lease rLease"), dated for reference purposes only
and between NEW HOPE MISSIONARY BAPTIST CHURCH
March 1, 2002
, is made by
C'Lessor")
and. LIBRARY BOARD OF TRUSTEES
,Lessee"),
(collectively the "Parties", or individually a "Party").
1.2(a} Premises: That certain portion of the Project (as defined below), known as Suite Numbers(s) .
ONE floor(s), consisting of approximatety rentable square feet and approximately
square feet("Premlses"). The Premises are located at: 1505 WEST HIGHLAND AVENUE , in the City of
SAN BERNARDINO ,County of SAN BERNARDINO ,State of CALIFORNIA, with zip code
92411-7369. In addition to Lessee's rights to use and occupy the Premises as hereinafter specified, Lessee shall have non-exclusive rights to the Common
Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any rights to the roof, the exterior walls, the area above the dropped ceilings, or
the utility raceways of the building containing the Premises CBullding") or to any other buildings in the Project. The Premises, the Building, the Common Areas, the
land upon which they are located; atong with all other buildings and improvements thereon, are herein collectively referred to as the "Project." The Project consists
of approximately 27, 296 rentable square feet. (See also Paragraph 2) .
1.2(b) Parking: N I A unreserved and N I A reserved vehicle parking spaces at a monthly cost of S
per unreserved space and S N I A per reserved space. (Sae Paragraph 2.6)
1.3 T enn: years and
rConmencement Date") and ending
("Expiration Date"). (See also Paragraph 3)
1.4 Early Possession:
(See also Paragraphs 3.2 and 3.3)
1.5 Base Rent: S 3,058.30 per month ('Base Rent)", payable on the
commencing MARCH 1, 2002 . (See also Paragraph 4)
o If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.
1.6 b.esses', S:IUF8 sf OperatiRg EXPSR&8 IRGrease: perssAt ( ~) rlssses's ihare"). lesaes's:
g:t;.,are Rat ~eF! ;alS1J~;te~ 9'j di"isiR5I tAB appreximate fiRtablg &"tuare fS9"99 sf tt'e PreFRi686 by \tie tetal apprsltimata s't\Jare fG9ta99 af tl:le reAtable spa'9
G9FltaiFlBa iF! ~1::l9 Prajest IRa BRall Rat as 6Y~BittQ F9'1SiSR euc;ept iF! G9RR9~tigR ..4tJ::l aA aatyal GRaA:99 iF! the eiae 9f~9 Premises sr a el:llaRge iR tAB SpS'S9 a"ail:1ble
klr lease iF! tAe PFsje;:t.
useable
N/A
months rOriginaJ Term") commencing _
MARCH 1, 2002
MARCH 1, 2002
("Early possession Date").
FIRST
day of each month
1.7
Base Rent and other Monies Paid Upon Execution:
(a) Base Rent: $ for the period
(b) Security DeposK: SONE MONTH'S RENT ("Security Deposit"). (See also Paragraph 5)
(c) Parking: $ N I A for the penod
(d) other: S N/A for
(e) Total Due Upon Execution ofthis Lease: S
Agreed Use: COMMERCLl\.L OFFICE PURPOSES
N/A
1.8
1.9
1.19
Base Year; Insuring Party. The Base Year is
2002
. (See also Paragraph 6)
Lessor is the "Insuring Party". (See also Paragraphs 4.2 and 8)
=~='::~".:.: ;\,S.: :~~: ~:P: :~
: 0 s; Q(j a Brel~eF6 (the "BF'Skers") SREI bralterag9 relatisF!shlps east iF! tRia tFaRsaGtieA (sl:lesl{ appli;able
ilel<e&);
B
B
repRUJilJRts lesser 811Gl1016FIBl"j rL.esser's Srgker");
AlproGaRts 1:.;&;99 9lt"]YG:P'gty C'!".'9tUg', ;~k8r"): or
Initials
Initials
Page 1 of 15
REVISED
FORM OFG.1.sr.l9E
a:> 1999 "American Industrial Real Estate Association
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Plge 3 of 16
e
rB~rJli8Flts bsti:ll8Sssraf'lS. 1:.3&&81 ("Cy.. "geml)" ';.
Is) PilVMIAt tla Brelt_r,: "FaA 'J(I:;~iGR 8Fl8 all II) 6f~. 1:."5118; 8'9tt:ll'l~'S. llSsQr SRld pa~ "t1, 9FiillAi
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t9(81 8&$8 1"I8AI: fv tRa 8' aln,aS!, SBP '~es nJPallr.~ 9~ 'hB 8FG11erS)
1.11 Guarantor The cbligallcns of the loessee under this Lease shell :>e guS:rar1teed by
1" ~tl:11
("Guarantor") (See also Paragraph 37)
1.12 Business Hours for the Building:: j : .~I 0 a.m. to 9: 00 p.m., Ma1days t~cugh Fridays [ex:ept BUlcling ~old&ys) and
7 : 'J (j a.m. to 6: (] 0 pIT". Q'I Saturdays {exc~t s\';ildinlji H~days) "Bullclng Holidays" sh!llll :onean ,he datts of cOservation ot ~JlM Yea!r's Clay,
Presidenl's Day Merraial Cay, Independence Oay, L3bcr Cay, Thenksglvhg Day,i'~d C~ristmes Day. ,liIRS
=h4j L.llnr tW1il1i111li1 ilr','ltts tIlt It''Iilr;iAi '1:1, lir; ;Si6lA5 a' ".ri!lrl!li:l11.1 b.unrl tlQT ggliillt'~ o'liFe'lU II'I fSlI;-o'iAg:
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e ill;CFi;i1:"
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II. :l;1
2. Premises
4.1 Letting. Lessor he~eby Ieeses to Lessee. ard Lessee 'lereby leases from :...essor, the Premises. for the term. at the renlal. and upoo all of the
terms, '::O\Ienants and conditions set fath in this lease. Unless otherwise provided herein, erry stalemenl cf size set lath in !his lease, erthat may have been used
In calculating ReI'It, Is an approXlmaticn wnlch the ~artles agree Is reasO"Iable 31ld any ~a)ments bued thereon are ,"'lCt subject to revision whet1e' or rot lhe acl!.:al
size is more ~ less. Note: LesSH Is advtsed to verIfy the actual slZI prior to elCecutlng this Lease.
2.2 Condition. ~essor shall deliver the Pr!n'liSes 10 lessee in ! clean eonditiO"l on the Cormlercement Date a the Erly PossessiO'} Date,
whichever first occurs ("Start Date"). and warrants that lt1e existing electrical, ph.ir.1l:tng, fire sprinkler, Ii~ting, heatrng, vef1tilaii~ and air :;:Cliditiol1ing systems
("HVAC"). a"d ail other items ....t1I:;:h the lessor is obligated to construct pursuant to lne Wr:r':< Letter attached hereto. if arrt. dher tha" those ca:structej by Lessee.
shal be in good OPerating concit;on on !&i::t dete
2.:3 Compliance. i..essor wamll'1ts that tne imprOlemenls comprising rhe Premises ar,d tne Common Areas Ccmr::~/-Mti the builJ'ii"lg codes that
were in effect at the lime that eech such i,.,.:l/'C\oemert. or portion thereof, wes constructed, and als~ with al appiicatle laws, covenants cr restrictions cf record.
f'89utations, end ordinances ("Applk:able Requirements") In ettecl: en :he Shrt Date Said warran~ does rot app~ to the use to 'Nhit:r Lessee will put the
Premises, mooificallcns which may be required by the Americans with Disabilities Act or any similer laws as a result of L~see s use (see Paragrapn 50), or to at'Iy
Aleratlcns ::r utility tnstallatloos (as defined In ~aragl1lph 7.3(6)) made 0( :obe mace by lessee. NOTE: L.ssee Is responsIble for deterrTinlng 'M1e1her or not
the zoning and other Appllc:abl, Requirements are approprtate for Lesse.', InCanded us., and acknowledges that past lJses of th. F'remlses m~ no
longer be allawtd. If lhe premises do not ccmply with said warranty, Lessor shall, except as cthelWise provided, prOl':"lpl:1y aft.er receiot of writte" notice from
Lessee settin;;;l forth with spec:ficit'J the neue and extent of such non-compliance, rectify the sa"'e 11 tl"e Applicable ~equirements are hereafter c:1a~rlied 50 as to
require dt.r;ng the ler", of this lease the corlSlructicn of a'1 additiQ'l to or an a~eratiil1 of the F'rernises, the remedatia: of any Hazardous $lLstance. or the
remforcement or other phojsical mocifl:atlon oflne Premises ("Ca,:lltal ExpendIture"). Lessor and lessee shal allocate the cos: of such "It'ork as follOWS:
(a) SUbject te ~arlgraph 2.3(c) below, if such ':apIU.1 Exper'ICitures are ~equred as a result 01 !he spe-::inc and ui'lique use ':f the Premises by
lessee as cor11=a~ with uses by tenants In generaL "essee shall be fUlly respo15ib,e fa tl'!e ccst therect. ~l'O\oidec::. hONe'lt" that if suc., :apltai Etper.di!ure is
rec;ui~ed dr.ng the lasl 2 years oflhis Lease and lt1e cost therecf exceees E ma1tls' Base Renl, i..essee rray instead terminate ti'lis lease ~le5S Lessor notifies
Lessee, j;"l writing, wittin10 days after :eceipl of Lessee's terMna:ial notice that Lessor na~ elected to pay the dfference between lhe adLal ccst Ir.ereof and the
amOJnl equal to 6 moolhs' Base Rent. It Lessee elects ter."inatitfl. Lessee shall :mmediaceiY cease the Lse of the Pre"lses ..mic1 requires such Capital
Expenditure and delver to Lesser wrtten notice speclf'Jing a tel'l'l'inaticr, date It leas: SO days theresfter. Such leminatJCI'l date s/1al!, however, in no evert be eartier
t"lan the last daytnat Lessee could legaly utilize the ~remises wthout commencing su~h Capital Expendlure.
(b) 11 such Cap!tal Expenditure Is not the :esutt 01 tt:e specifc S1rd unique use of the Qrenlses by Lessee (SUCh as, gcvemmerhlly mandated
seismiC mcditicatiensi, then Lessor and Lessee shall allocate the cost eX such Capital Expenditure as follows: less::r shall ad\MICe the funds necessar'J for sud't
Capilal E~endit~re but lessee shel be oIJiiQl!ll:ed to pal. each month during the remainder of the term of this Leese. tfI the date on ....'hlch Base Rent i1 :lUe, lWl
amaml equa: to the product Qf rnJnlplying Lessee's share c( the cost of such CaDite.1 expenditure (the percen!age S;eciflecl in =e.regraph 1.6 by a fr1lctial, the
numerata a'M'lich IS one, and the derominator a which is 144 Cie. 1J144th of the ccst per moothl. Lessee shall pay interesl on the unamcrtized balance a
Lessee's share at a rate that IS corm'l9l'c'aly reasonable in the judgmen of Lessor's accountaf'lts. Lessee may. however, prepay its obIjgat~on at any lime. P""QVic:ed
/'lowever, !:'ISt if such Capital Expendib.re is reqt..ired during the last 2 "years of this Lease 0( if Lessor reasooaby ce!:ermlnes that it is r:oc ec:roomically feasil:le to r:;ey
Its Stiare thereof, lessOl'" 51;8:11 have t.'1e q:ticn to termmate this Lease upon 90 days ~rlor written not,ce to loessee l.:nless Lessee notit:es Lessor, ;n writing. within 1 a
days aller receipt ct Lessor's termlnatial notice that ~essee Wili Day fer such Ca~rlal Expenditure. If Lessor C:oes not ~ecl to tenninate. and fails :0 tencer ~ts share 0'
any such Capital Expenditure, Lesse! m~ adVance sue,", runcs and deduct same, 'Nth Interest, frern Re"t un~il Lessor's s!1are ~ such r.OStS rave bee" fully paid. if
Lessee IS urable to "nan::e ~!Ssor's share cr it t~e balilnce of the Rent due aiM payable for the remainder of this lease is not sufficil!f1 to !tIlly reirrburse lessee 01
an offset ta5is, lessee shall tUNe the rigl"ll: to lerm:nate this Lease upon 30 days written notice to Lessor
Ie) Nctwithstanding the above. the prcMsioos concerring Cap'tell Expenditures are intended to eppi'i r:ny to :101"1Vdw"ltary. unexpected, and new
Apoliceble ~equiremel"lts. If !he Capital ExpenditJres are instel!lCl trtgsered by lessee as e result cf an actual or proposed Charge i" use. cha~e in inte"sity cI use,
or mo:ific!~icr: to Ihe Premises ~hen, and in th!t event, loessee shall be fully responsible ter the cost thereof, o.'"Id Lessee shall net have any ri~t':t to terminete this
Lease.
2.4 Acknowledgemenls. lessee acknONledges that (a) Lessee t:as been advised by lessor anCIor Brokers 10 satisfy itself witi") respect to the
condifon or te Premises (including but not imited to tt1e electrical, HVAC and fire sprinkier systems. SeeLrit,., eilVlronmenlal aspects, and compliaxe wit,
~ents). &Jld-Ihelr s;Jlte.bility fer Lessee's intendec use, :b, Les3ee has made such Investi!;jalioo as it deems ,1ecessary with reference to such
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Initials
Initials
\I 1999 . American Industrial Real Estate Assoc:latlon
Page2of1S
REVISED
FORM OFG.l.9199E
...umes all responsibility therefor as the same relate to lis bCCtJtlii\ey oi the ~"ri\_, end (0) _ Lessor, Lessor's egents, nor B_ hive mode
or written represe~ions or warranties with respect to said matters other than as set forth in this Lease. In addrtion, Lessor acknowledges that: (i) Brokers
made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole
"' ;..ponslbllity to investigate the financial capability andlor sultabiiity of all proposed tenants.
2.q Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect tf immediately prior to the
start Date, Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work.
2.6 Vehicle Parking. $0 long as Lessee is not in default, and subject to the Rules and Regulations attached hereto, and as established by Lessor
from time to time, Lessee shall be entitled to rent and use the number of parking spaces specified in Paragraph 1.2(b) at the rental rate applicable from time to time
for monthly parking as set by Lessor and/or its licensee.
(a) If Lessee commits, permits or allows any of the prohibited actiVities described in the Lease or the rules then in effect, then Lessor shall have
the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Lessee,
Which cost shall be immediately payable upon demand by Lessor.
(b) The monthly rent per parking space specified In Paragraph 1.2(b) Is subject to change upon 30 days prior written notice to Lessee. The
rent for the parking is payable one month in advance prior to the first day of each calendar month.
2.7 Conmon Areas _ Definition. The term "Common Areas" is defined as all areas and facilities outside the Premises and within the exterior
boundary line of the Project and interior utility raceways and installations within the Premises that are provided and designated by the Lessor from time to time for the
general nonexclusive use of Lessor, Lessee and other tenants of the Project and their respective employees, suppliers, shippers, customers, contractors and
invitees, including, but not limited to, common entrances, lobbies, corridors, stairwells, public restrooms, elevators, parking areas, loading and unloading areas,trash
areas, roadways, walkways, driveways and landscaped areas.
2.8 Common Areas a Lessee's Rights. lessor grants to Lessee, for the benefit of Lessee and its employees, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the nonexclusive right to use, in common with others entitled to such use, the Common Areas as they exist
from time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Project. Under no circumstances shall the right herein granted to use the Common Areas be deemed to include the right to
store any property, temp:lrarily or permanently, in the Common Areas. Any such storage shall be permitted only by the prior written consent of Lessor or Lessor's
designated agent, which consent may be revoked at any time. In the event that any unauthorized storage shall occur then Lessor shall have the right, without notice,
in addition to such other rights and remedies that It may have, to remove the property and charge the cost to Lessee, Which cost shall be immediately payable upon
demand by Lessor.
2.9 Common Areas. Rules and Regulations. Lessor or such other person(s) as Lessor may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time, to adopt, modify, amend and enforce reasonable rules and regulations rRules and
Regulations") for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation of good order, as well as
for the convenience of other occupants or tenants of the Building and the Project and their invltees. The Lessee agrees to abide by and conform to all such Rules
and Regulations, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessor shall not be responsible to
Lessee for the noncompliance with said Rules and Regulations by other tenants of the Project.
2.10 Common Areas _ Changes. Lessor shall have the right, in lessor's sole discretion, from time to time:
(a) To make changes to the Common Areas, including, wtthoutlimltation, changes in the location, size, shape and number of the lobbies,
'Windows, stairways, air shafts, elevators, escalators, restrooms, driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress,
direction of traffic,landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains
available;
(c) To designate other land outside the boundaries of the Project to be a part of the Common Areas;
(d) To add addrtional buildings and improvements to the Common Areas;
(e) To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Project, or any portion
thereof; and
(f) To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Project as Lessor
may, in the exercise of sound business judgment, deem to be appropriate.
3. Term.
3.1 Tenn. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.
3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obilgatlon to pay Base Rent shail
be abated for the period of such eaMy possession. All other terms of this Lease (including but not limited to the obiigations to pay Lessee's Share of the Operating
Expense Increase) shail, however, be in effect during such period. Any such early possession shell not affect the Expiration Date.
3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the validtty of this Lease. lessee shall not, hO'll't'ever, be obligated to pay Rent or perform Its other obligations until Lessor delivers possession of the
Premises and any period of rent abatement that Lessee would otherwise have er10yed shall run from the date of detivery of possession and continue for a period
equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession
is not delivered Within 60 days after the Commencement Date, as the same may be extended under the terms of any Work Letter executed by Parties, Lessee may, at
its option, by notice in writing wtthin 10 days after the end of such 60 day period, cancel this lease, in which event the Parties shall be discharged from ell obligations
hereunder. If such written notice is not received by lessor within said 10 day period, Lessee's right to cancel shall terminate. If possession of the Premises is not
delivered within 120 days after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, in writing.
3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to lessee until Lessee complies with its obligation to
provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perfonn all of its obligations under this lease from
and after the start Date, including the payment of Rent, notwithstanding Lessor's election to withhold possession pending receipt of such evidence of insurance.
Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but lessor may elect to withhold
possession until such conditions are satisfied.
4. Rent.
4.1. Rent Defined. Ail monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be
rent ("Renf').
4.2 Oporoling Expense Increa... Lessee shall pay to Lessor during the term hereof, in addition to the Base Rent, Lessee's Share of the amount
by Which all Operating Expenses for each Comparison Year exceeds the amount of all Operating Expenses for the Base Year, such excess being hereinafter
referred to as the -Operating Expense Increase-, in accordance with the following provisions:
(a) "Base Yea," is es specified In Paragraph 1.9.
(b) "Comparison Yea," is defined as each calendar year during the term of this Lease subsequent to the Base Year, provided, however,
Lessee shall have no obligation to pay a share of the Operating Expense Increase applicable to the first 12 months of the Lease Term (other than such as are
mandate~ by a govemmentalauthority, as to Which government mandated expenses Lessee shell pay Lessee's Share, notwithstanding they occur during the first
Initials
Initials
e 1999 "American Industrial Real "-e Assoclallon
Page 3 of 15
REVISED
FORM OFG,,1.sJ99E
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J. ~_... ""-'~'" .,... ....-.QU''ill ~,- """',-- ,- ",- ,"- .11.... ,_ ""'''''"~,~, '_0'" un; ~ '11:::I11' o,oa.. L,IlII; .,............ -"""" '"
of sUCh Comparison Year as to which Lessee is responsible for a share of such increase,
~ (c) "Operating Expenses" include all costs incurred by Lessor relating to the ownership and operation of the Project, calculated as if the
~ was at least 95% occupied, including, but not limited to, the following:
(i) The operation, repair, and maintenance in neat, clean, safe, good order and condition, but not the replacement (see
subpllragraph (g)), of the following:
(aa) The Common Areas, including their surfaces, coverings, decoratiVe items, carpets, drapes and window
coverings, and including parking areas, loading and unloading areas, trash areas, roadw2lys, sidewalks, walkways, stairways, parkways, driveways, landscaped
areas, striping, bumpers, irrigation systems, Common Area lighting facilities, building exteriors and roofs, fences and gates;
(bb) All heating, air condnioning, plumbing, electrical systems, IWe safety equipment, communioallon systems and
other equipment used in common by, or for the benefit of, lessees or occupants of the Project, including elevators and escalators, tenant directories, fire detection
systems including sprinkler system maintenance and repair,
(ii) Trash disposal, janitorial and security services, pest control services, and the costs of any environmental inspections;
(iii) Any other service to be provided by Lessor that is elsewhere in this Lease stated to be an "Operating Expense";
(iv) The cost of the premiums for the insurance policies maintained by Lessor pursuant to paragraph B and any deductible
portion of an insured loss concerning the Building or the Common Areas;
(v) The amount of the Real Property Taxes peyable by Lessor pursuant to paragraph 10;
(vi) The cost of water, sewer, gas, electricity, and other publicly mandated services not separately metered;
(vii) Labor, salaries, and applicable fringe benefrts and costs, materials, supplies and tools, used in maintaining and/or cleaning the
Project and accounting and management fees attributable to the operation of the project;
(viii) The cost of any Capital Expendnure to the Building or the Project not oovered under the provisions of Paragraph 2.3 provided;
however, that Lessor shall allocate the cost of any such Capital Expenditure over a 12 year period and Lessee shall not be required to pay more than Lessee's Share
of 11144th of the cost of such Capital Expenditure in any given month;
(ix) Replacement of equipment or improvements that have a useful life for accounting purposes of 5 years or less,
(d) Any nem of Operating Expense that is speciflOBlly attributable to the Premises, the Building or to any other building in the Project or to
the operation, repair and maintenance thereof, shall be allocated entirely to such Premises, Buikling, or other building, However, any such Item that is not specifically
attributable to the Building or to any other building or to the operation, repair and maintenance thereof, shall be equitably allocated by Lessor to all buildings in the
Project.
(e) The inclusion of the improvements, facilities and services set forth in Subparagraph 4.2(c) shall not be deemed to impose an
obligation upon Lessor to either have said improvements or facilities or to provide those services unless the Project already has the same, lessor already provides
the services, or Lessor has agreed elsewhere in this Lease to provide the same or some of them.
(!) Lessee's Share of Operating Expense Increase shall be payable by Lessee within 10 days after a reasonably detailed statement of
actual expenses is presented to lessee by lessor. At Lessor's option, however, an amount may be estimated by Lessor from time to time in advance of Lessee's
Share of the Operating Expense Increase for any Comparison Year, and the same shall be payable monthly during each Comparison Year of the Lease term, on the
same day as the Base Rent is due hereunder, In the event that Lessee pays Lessor's estimate of lessee's Share of Operating Expense Increase as aforesaid,
Lessor shall deliver to Lessee within 60 days after the expiration of each Comparison Year a reasonably detailed statement showing Lessee's Share of the actual
Operating Expense Increase incurred during sueh year. If Lessee's payments under this paragraph {f} during said Comparison Year exceed Lessee's Share as
indicated on said statement, Lessee shall be entitled to credit the amount of such overpayment against Lessee's Share of Operating Expense Increase next falling
due. If Lessee's payments under this paragraph during said Comparison Year were less than Lessee's Share as indicated on said statement, Lessee shall pay to
Lessor the amount of the defICiency within 10 days after delivery by Lessor to Lessee of said statement. Lessor and Lessee shall forthwith adjust between them by
cash payment any balance determined to exist with respect to that portion of the last Comparison Year for vAlich Lessee is responsible as to Operating Expense
Increases, notwithstanding that the Lease term may have terminated before the end of such Comparison Year,
(g) Operating Expenses shall not include the costs of replacement for equipment or capital components such as the roof, foundations,
exterior walls or a Common Area capital improvement, such as the parking lot paving, elevators, fences that have a useful life for accounting purposes of 5 years or
more unless n is of the type described in paragraph 4.2(c) (viii), in which case their cost shall be included as above provided.
(h) Operating Expenses shall not include any expenses paid by any tenant directly to third parties, or as to which Lessor is otherwise
reimbursed by any third party, other tenant, or by insurance proceeds,
4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States on or before the day on which it is
due, wtthout offset or deduction. (except as specifically permitted in this Lease), Rent for any period during the term hereof which is for less than one full calendar
month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to such other
persons or place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of
Lessor's rights to the balance of such Rent, regardless of Lessor's endorsement of any check so stating, In the event that any check, draft, or other instrument of
payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge. Payments will be
applied first to accrued late charges and attomey's fees, second to accrued interest, then to Base Rent and Operating Expense Increase, and any remaining amount
to any other outstanding charges or costs.
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease, If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security
Deposit for the payment of any amount due Lessor or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur
by reason thereof. If lessor uses or applies all or any portion of the Security Deposit, Lessee shall within 10 days after written request therefor, deposit monies with
Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shall,
upon written request from Lessor, deposit additional moneys with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to
the increased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material change in the
business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor's
reasonable judgment, to account for any increased wear and tear that the Premises may suffer as a resutt thereof. If a change in control of Lessee occurs during
this Lease and following such change the financial cordnion of Lessee is, in Lesso(s reasonable judgment, significantly reduced, Lessee shaD cleposn such
additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in financial
condition. Lessor shall not be required to keep the Security Deposn separate from no general accounts. Within 14 days after the expiration or termination of this
Lease, W Lessor elects to apply the Security Deposn only to unpaid Rent, and otherwise within 30 days atter the Premises have been vacated pursuant to Paragraph
7.4(c) below, Lessor shall retum that portion of the Security Deposn not used or applied by Lessor. No part of the Security Depos~ shall be considered to be held in
trust, to bear Interest or to be prepayment for any monle's to be paid by Lessee under this Lease.
6. Use.
6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is reasonably comparable thereto, and
for no other purpose, Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs
occupants of or causes damage to neighboring premises or properties. Lessor shall not unreasonably withhold or delay its consent to any wrttten request for a
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,; the Agreed Use, so long I. the lime ....11 not Impair !hl! ItnJcturaI l/llegr1ty Of tho improvements of the BUllcling, ....11 not .dversely _t tho
A' . electrical, HVAC, and other systems of the Building, and/or wilt not affect the exterior appearance of the Building. If Lessor elects to withhold consent,
. , snail within 7 days after such request give written notification of same, which notice shall include an explanation of Lessor's objections to the change in the
use.
- 5.2 Hazardous Substances.
. (a) Reportable Uses Require Consent. The tenT! "Hazardous Substance" as used in this lease shall mean any product, substance, or
W115te whose presence, use, manufacture, disposal, transportation, or release, either by Itself or in combination with other materials expected to be on the Premises,
is either: (I) potentially injurious to the public health, safety or welfare, the environment or the Premises. (ii) regulated or monitored by any governme....tal authority, or
(iii) a basis for potentialliabfUty of lessor to any goverrvnental agency or third party under any applicabte staMe or common law theory. Hazardous Substances shall
Include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, byproducts or fractions thereof. Lessee shall not engage in any
activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the exp-ess prior written consent of Lessor and timely
compliance (at Lessee's expense) with all Applicable Requirements. -Reportable Use" shall mean (I) the Installation or use of any above or below ground storage
tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report,
notice, registration or business plan is required to be flied with, any governmental authority, and/or (iii) the presence at the Premtses of a Hazardous Substance with
respect to 'Iotlich any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighbonng properties.
Notwithstanding the foregoing, lessee may use any ordinary and customary materials reasonabty required to be used in the normal course of the Agreed Use such
as ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning matenals, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose
lessor to any liability therefor. In addition, lessor may condition its consent to any Reportable Use upon receiving such additional assurances as lessor reasonably
deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to,
the installation (and removal on or before lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security
Depesn.
(b) Duty to Intonn lessor. If lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on,
under or about the Premises, other than as previously consented to by lessor, lessee shall immediately give written notice of such fact to lessor, and provide
lessor with a copy of any report, notice, claim or other documentation which It has concerning the presence of such Hazal:dous Substance.
(c) Lessee Remediation. lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the
Pr.mi... (including through the plumbing Of sanitary sewer .ystem) and shall promptly, at Le....'. expense, oomply with all Applicable R.quirements .nd take .11
investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the
maintenance, security andlor monttonng of the Premises or neighboring properties, that was caused or materially contributed to by lessee, or pertaining to or
involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, or any third party.
(d) Lessee Indermification. lessee shall indemnify, defend and hold lessor, Its agents, employees, lenders and ground lessor, if any,
harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys' and consultants' fees arising
out of or invoMng any Hazardous Substance brought onto the Premises by or for lessee, or any third party (provided, however, that lessee shall have no liability
under this Lease With respect to underground migration of any Hazardous Substance under the Premises from areas outside of the Project not caused or contributed
to by lessee). lessee's obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or
suffered by lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this lease. No
termination, cancellation or release agreement entered into by Lessor and lessee shall release Lessee from its obligations under this lease with respect to
Hazardous Substances, unless specifically so agreed by lessor in writing at the time of such agreement.
(e) Lessor Indemnification. lessor and its successors and assigns shall indemnify, defend, reimburse and hold lessee, its employees and
lenders, harmless from and against any and aU environmental damages, including the cost of remediation, 'Which result from Hazardous Substances which existed on
the Premises prior to lessee's occupancy or which are caused by the gross negligence or willful misconduct of lessor, Its agents or employees. lessor's
obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration
andlor abatement, and shall survive the expiration or termination of this lease.
(f) Investigations and Remediations. Lessor shall retain the responsibility and pay for any investigations or remediation measures required
by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to lessee's occupancy, unless such
remediation measure is required as a result of lessee's use (including "Alterations", as defined in paragraph 7.3(a) below) of the Premises, in which event lessee
shall be responsible for such payment. lessee shall cooperate fully in any such activities at the request of lessor, including allowing lessor and lessor's agents to
have reasonable access to the Premises at reasonable times in order to carry out Lessor's investigative and remedial responsibilities.
(g) Lessor T.nninolion Option. If a Hazardou. Substance Condnion (... Paragraph 9.1 (.)) occurs during th. t.rm of this L..s., unless
Lessee is legally responsible therefor (in which case lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this
L.... .h.1i continu. in full forc. and .ffec~ but .ubject to L..sor. right. und.r Paragraph 6.2(d) and P.ragraph 13), Lessor may, .t L.ssor. option, enher (I)
investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably JX)ssible at lessor's expense, in which event this lease shall
continue in full force and effect, or Oi) if the estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is
greater, give wrttten notice to lessee, within 3D days after receipt by lessor of knowledge of the occurrence of such Hazardous Substance Condition, of lessor's
desire to terminate this lease as of the date 60 days following the date of such notice. In the event lessor elects to give a termination notice, lessee may, within 10
days thereafter, give written notice to lessor of Lessee's commitment to pay the amount by which the cost of the remediation of such Hazardous Substance
Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000, whichever is greater. lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30 days following such commitment. In such event, this lease shall continue in full force and effect, and lessor shall proceed
to make such remediation as soon as reasonably possible after the required funds are available. If lessee does not give such notice and provide the required funds
or assurance thereof within the time provided, this lease shall terminate as of the date specified in lessor's notice of termination.
6.3 Lessee'. Compliance with Appllcabl. Requirements. Except a. otherwi.. provided in this Leas., Lessee shall, at Lessee'. sole expen..,
fuHy, diligently and in a timely manner, materially comply with all Applicable Requirements, tho requirements of any applicabl. fire tnsuranc. underwriter Of rating
bureau, and the recommendations of lessor's engineers and/or consultants which relate in any manner to the Premises, without regard to whether said requirements
are now In effeel Of becom. .ffectiv. after tho Start D.t.. L..... shell, within 10 days .fter receipt of Lessor'. written request, provide Lessor with oopi.. Of 011
permits and other documents, and other infonnation evidencing Lessee's compHance with any Applicable Requirements specified by Lessor, and shall immediately
upon receipt, notify lessor in wrffing (with copies of any documents invOlved) of any threatened or actual claim, notice, citation, warning, complaint or report
pertaining to or Involving the foUur. of L..... Of th. pr.mises to comply with any Applicabl. R.quirements.
6.4 Inspection; Compli.nc.. L..sor and Lessor'. "L.nd.,. (.. d.fined in P.ragraph 30) .nd oonsultonts sholl have th. right 10 ent.r into
Premises at any time, in the case of an emergency, and otherwise at reasonable times, for the purpose of Inspecting the condttion of the Premises and for verifying
oompliance by Lessee with this L..... The cost of .ny such inspections .h.1i be paid by Lessor, unless. violation of Applicable R.quir.m.nts, or a Hazardous
Substance Condition (... paragraph 9.1.) i. found to exi.t or be immin.nt, Of th. in.pection is requested or ord.red by. govemm.ntal authority. In .uch ca..,
Lessee shall upon request reimburse lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contaminaUon.
7. Maintenance; Repairs; Utility Installatlonsj Trade Fixtures and Alterations.
7.1 Lessee's Obligations. Notwithstanding lessor's obligation to keep the Premises in good condttion and repair, lessee shall be responsible for
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'payment of the cost Ihereof 10 Lessor as addilional rent for that portion of the cost of ilny maintenance and repair of Ihe Premises. or any equipment (wherever
located) th.at ,serves o~ly Lessee or the Premise:s. to the extent such cost is attributable to causes beyond normal wear and tear. Lessee $haJJ be responsitJM: for the
cO~1 or painting, repairing or replacing wall coverings. and to repair or replace any improvements with the Premises. Lessor may. at its option, upon reuona~
notice. elect to have lessee perform any particular such maintenance or repairs the cost of Vvtlich Is otherwise Les.see's responsibUity hereunder.
, . 7.2. . lessor's Obligltions. Subject to the provisions of Paragraphs 2.2 (Condition). 2.3 (Compliance), 4.2 (Operating Expenses), 6 (Use), 7.1
. (L..... s ObllgallOns). 9 (Damago or Dos'ruc.ion) and 14 (Condemnalion). LosSO(. sUbjec..o roimbul1leme.. pursuan'lo Paragraph 4.2, shall keep in gOOd ord",
condition and repair the foundations. exterior walls, structural condition of interior bearing walls, elderior roof, fire sprinkler system, fire alarm and/or amoke detectic~
systems, fire hydrants, and the Common Areas. lessee expressly waives the benefit of any statute now or hereafter in effect 10 the extent it is inconsistent with the
terms of thiS lease
7.3 Utility InstallaCions; Trade Fixtures; AJter~ions.
. , (a) Definitions. The term ~Utility Installations" rerers to all noor and window coverings, air lines, vacuum lines, power panel$, elec:tricaJ
dlstnbutJon, security and (lfe protection systems, communication cabling, lighting ftlrtures, HVAC equipment, and plumbing in or on lhe Premises, The term "Trade
Fixtures" shall mean lessee's machinery and equipment that can be remo\led without doing material damage to the Premises. The term ~ AJterations" shill mun
any mOdificatIOn of the im~ovements, other than Utility Inslallations or Trade Fixtures, whether by addition or deletion. "Lessee Owned AneraUons i1ndJor Utility
Installations" are defined as Alterations and/or Utility Installations made by lessee that are not yet owned by Lessor pursUi1'\t to Pantgraph 7.4(a),
(b) Consent. lessee shall not make any Alterations or Utility Installations to the Premises wTthout Lessor's prior written consent. lessee may,
however, make non.structural Utility Installalions to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they
are not \lislble from the outside, do not involve puncturing, relocating or removing the roof, ceilings, floors or any existing walls, will not affecl the electrical, plumbing,
HVAC, andfor life safety systems, and the cumulative cost thereof during this lease as extended does not exceed $2000. Notwithstanding the foregoing, l.....
shall not make or permit any roof penetrations ind.'Of install anything on the roof without the prior wrinen approval of lessor. lessor may, as a precondlion to
granting such approval, require le$See to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations thai Lessee shall dun to
make and wtlich require the consent of the lessor shall be presented to lessor in written form with detailed plans. Consent shall be deemed conditioned upon
lessee's: (i) acquiring aU Ipplicable governmental permits, (ii) furnishing lessor with copies of both the permits and the plans and specifications prior to
commencement of the work, and (Iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any
Alterations or Utility Installations shaH be performed in a workmanlike manner with good Ind sufficient malerials. lessee shall promptly upon compfetion furnish
Lessor with asbuilt plans and specifications. For work which cosls an amount in excess of one month's ease Rent, lessor may condition its consent upon Lessee
providing a lien and completion bond in an amount: equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon lessee's posting In
additional Security Deposit with lessor.
(cl Liens; Bonds. lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for lessee at
o~ for use on the Premises, which claims are or may be secured by any mechanic's or malerialmen's lien against the Premises or any interest therein. lessee shall
g.....e Lessor not less than '0 days notice prior 10 the commencement of any work in, on or about the Premises, and lltSSor shall have the right to post notices of
non-responsibility., If lessee shall contest the validity of any such lien, claim or demand, then lessee shall, at its sole expense defend and protect itselt, Lessor and
Ihe PremIses agaInst the same and shall pay and satisry any such adverse judgment Ihat may be rendered thereon before the enforeement thereof. It lessor shall
reqUire, Lessae shag furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying lessor against liability
for the same. If Lessor elects to participate in any such action, Lessee shall pay lessor's anomeys' 'ees and costs
7,4 Ownership; Removal: Surrender; and Restoration.
(a) Ownership. Subject to lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations
made by Lessee shall be the property of lessee, but considered a part of the Premises. Lessor may. at any time, elect in writing to be the owner of III or any
specified part of lhe lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b) hereof, all lessee Owned Alterations and
Utility Installations shall, at the expiration or termination of this lease, become the property of lessor and be surrendered by Lessee with the Premises.
'- (b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 00 and not later than 30 days prior to the end of the term of
- this lease, Lessor may require that any or all lessee Owned Atterations or Ufllity Installations be removed by the expiration or t.rminaUon of Ihis lease. lessor may
require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without: Ihe required consent.
(c) Surrender: Restoration. lessee shaH surrender the Premises by the ElCpiration Date or any earlier termination date, with all of the
improvements, parts and surfaces thereof clean and free of debris, and in good operating order, condition and stat. at repair, ordinary wear and tear excepted.
"Ordinary wear and teaf' shall not include any damage or delerloration that would ha\le been prevenled by good maintenance practice. Notwithstanding the
foregoing, if thIS lease IS for 12 monlhs or le5$. then lessee shall surrender the Premises in the same condition as delivered to lessee on the Start Date with NO
allowance fet ordinary wear and tear. lessee shall repair any damage occasioned by !he installation, maintenance or removal of Trade Fixtures, lessee owned
Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or tor lessee. Lessee shall also comple~eIy
remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances whIch
were deposited via underground migration trom areas outside of the Project) even if such removal 'MJuld require lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of lessee and shall be removed by Lessee. The failure by lessee to timely vacate the Premises
pursuant to lhis Pangraph 7.4(c) without the express written consent of lessor shall constiMe a holdover under the provisions of Paragraph 26 below.
8. Insurance; Indemnity.
8.' Insurance Premiums. The cost of the premiums for the insurance policies maintained by Lessor pUf$uant to paragraph 6 are inclUded as
Operating Expenses (see paragraph 4.2 (c)(iv)). Said costs shall include increases in the premiums resulting from additional coverage related to requirements of the
holder of a mortgage or deed of trust covering the Premises, Building and/or Project, IncreaSed valuation of the Premises, Building and/or Project, andlor iiI general
premiUm rate increase. Said costs shall nct, however, include any premium increases resulting from the nature of Ihe occupancy of any other tenant of !he Builcflng.
If the Project was not insured for the entirety of the Bue Year, then the base premium shall be the lowest annual premium reasonably obtainable for the required
Insurance as of the Start Date, assuming the most nom;nal use possible of the Building and/or Project. In no event, howe\ler, shaU LlSsee be responsible for any
portion of the premium cost attributable to liability insurance coverage in excess of $2,000,000 procured under Paragraph a.2(b).
8.2 Liability Insurance.
(a) Carried by Lessee. lessee shall oblain and keep in force a Commercial General liability policy of insurance protecting lessee and Lessor
as an additional insured againsl claims for bodily injury, personal injUry and property damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not
less than $1 ,OOO,COQ per occurrence with an annual aggregate of not less than S2,COO,QOO, an ~Additionallnsured-Managers or Lessors of Premises EndorsemeM!"
and contain the "Amendment of the Pollution Exclusion Endorsemenr for damage caused by heat, smoke or fumes from a hostile fire. The policy shan not COrDln
any intra-msured exclusions as between insured persons 0( organizations, but shall include coverage tor liability assumed under this lease as an "insured
contracr for the performance of Lessee's indemnity obligations under this Lease. The limits of said insurance shall not, however, limitlhe Uability of lessee not'
relie....e lessee of any obligation hereunder All insurance carried by lessee shall be primary to and not contributory with any similar insurance carried by Lessor,
whose insurance shall be COnsidered excess insurance only. lES.2fE_SHAI! '-IllT I5F fFQUlfFD TO DOfAIN II ~QIolMF.It:CIAI G~HEfAlIIA~Il!TY Miley OF
:~.lEJ..ES.S.EE 15 "ell; rn prQVlnF fa [E55nf ADF-QUArE ,-rOOF nF CDJ.lP^rA~1 F CDVHAGE ey A ~N)'FIDE 5Fl F.INC,I1It:ANCF. pfOGrAM
,~ (b) Carried by Lessor. Lessor shall main'ain liability insurance as described in Paragra.n B.2(a). in addition '0, and no' in Ueu of. the
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insur.,nce required to be maintained by Lessee. Lessee shall not be named as an additional insured Iherein.
e.J Property Insurance. Building. Improvements md Rent~ Value.
(a) Building and Improvements lessor shaD obtain and keep in force iI poIiey or policies of insurance in the name of lessor, with Ioaa
payable to Lessor, any ground-lessor. and to any Lender insuring loss or damage to the Building andlar Prcjed. The amol.A'11 of such insurance shall be equal to the
. full replacement cost of tne Building and/or Project. as the same shan exist from time to time. Of the amount required by .ny Lender, but in no event more than the
. commen:lalty reasonable and available insurable value thereof. Lessee Owned Alterations ilnd Utitity Installations, Trade Fixtures. and Lessee's personal property
shall be Insured by Lessee under Paragraph 8.4. If the coverage is ilvaifa~e and commercially appropriate, such poRcy or palicils shall insure against alt risks of
direct physical loss or damage (except the perils of neod and/or earthquake unless required by a Lender), inclucing coverage for debris r.-noval and the en(or~n
of .any Applicable Requirements requiting the upgrading, demolition, reconstruction or rllplacement of any portion of the Premises as thl ruutt of a covered loss.
Sar~ .oolicy or policies shall also contain an agreed valuation provision in lieu of any coinsulilnce dause, waiver of subrogation, ind inflation guard protection causing
an Increase In the annual property insurance coverage amount by ill factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for AU
Urban Consumers for the city nelfest to where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shalf not
exceed S 1,000 per occurrence.
(b) Rental Value. Lessor shall also obCain and keep in force a policy or policies in Che name of Lessor with Ios$ payable to Lessor and any
Lender, insuring the loss of Che rull Rent for one year with an extended period of indemnity for an additional 180 days ("Rental Value Insuranu"). Said insurance
shall contain an agreed valuation provision in lieu or any coinsurance clause, and the amount or coverage shaD be adjusted annually to renect the projected Rent
otherwise payable by Lessee, fer the next 12 month period.
(c) Adjacent PremiSl.s. Lessee shall pay ror any increase in the premiums ror the property insurance of rhe Building lod for the Cornman
Areas or other buildings in the Project if Slid increase is caused by Lessee's acts, omissions. use or occupancy of the Premises.
ed) Less.e's Improvements. Since Lessor is Che Insuring Party, LessOt shall not be required to insure Lessee Owned Alterations and Utility
Installalions unless the item in question has become the property of Lessor under the terms of this Lease.
e.4 Lessee's Property; Business Interruption Insurance. A MNAFlDF. !;FI F-INSUfANCF ,.rOt;IAt.t WHIr::H I"rtwtDFS r::nr..lP'AIAftl t: C:D\I!1tAeiE
t.4AY ~~ lJ!;!;:D IN II'U ml TIolF !N~UlANr::F r::OVFIAr.F rFmnRFUFIoJTA STATFDIN nus 9~cnON
(a) Property Dlimage. Lessee shall obtain and maintain Insurance coverage on all of Less..'s personal property, Trade Fixtures, and lessee
Owned Allerations and Utility Installations. Such insurance shall be full repJacement cost coverage lNith a deductit* of not to exceed $1.000 per occurrence. Th.
proceeds from any such insurance shall be used by Lessee for the replacement of personal ploperty, Trade Fixtures and Lessee Owned Alterations and Ulility
Installations. Lessee shall provide LesSOf with written evidence tnat such insurance is in rorce.
(b) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse lessee
for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business 01 lessee or attributable to prevention of
access to the Premises as a result of such perils.
(c) No Repruentltion 01 Adequate Coverage. Lessor makes no representation Chat lhe limits or forms ot coverage of insurance specified
herein are adequate to cover Lessee's property, business operalions or obligations under this Lease.
a.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or admitted to transact business in the stale where the
Premises are located, and maintaining during the policy term a. "General Policyholders Rating" of at least B.... V, as set forth in the most current issue of -Sest's
Insurance GuideN, Of such other raCing 1$ may be required by a lender. A nnNAfI'lDII= I;FI FNINa,ij'....Nr.F ,.'fn{;~AI.l I,UV' ~F I1!1';FD IN I IIW nF THF. TV,., Dro: INsurANCE
cou p ..."'v 011= c;r::rrI'lFD It.! THI~ l ~ A S~. Lessee shaD nor do or permil to be done anything v.tIich invalid ales the required insurance policies. lessee shall. prior to the
51art Date, deliver to Lessor certified copies of f)J/k:ies of such insurance or certificates evidencing the existence and amounts of the required inslRnce. No sueh
policy shall be cancelable or subject 10 modification except after 30 days prior written notice to Lessor. Lessee shall, at least 30 days prior to the expiration of such
policies, rurnish Lessor with evidence of renewals or "insurance binders" evidencing renewallhereof, or Lessor may order such insurance and charge the cost
(thereof to Lessee, which amour:t shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the
remaining term of this Lease, Wt1ichever is tess. If either Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but
shall nol be required 10, procure and maintain the same.
8.6 W,iver of Subrogation. Without ilffecllng any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and
waive their entire right to recover damages ilgainst the other, for loss of or dlmilSle to its property arising out of or incident to the petilS required to be insured agai~t
herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto. The Parties
Igree 10 have their respective property damage insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the
case may be, so long as the insurance is not invalidated thereby.
8.7 Indemnity. Except for Lessor's gross negligence or willful misconduct, Lessee shall indemnify, prolect, defend and hold harmless the
Premises. lessor and its agents, Lessor's master or ground lesser, partners and Lenders, from and against any and all claims, 10$5 of rents and/or damages,liens.
Judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or In conneclion with, the use and/or occupancy of the
Premises by Lessee. It any action or proceeding is tx'ought against Lessor by reason of any of the foregoing matters, lessee shall upon notice defend the same at
Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperilte with Lessee in such defense. Lessor need not have fll"st paid any such
claim in order to be deferded or indemnified
e.8 Exemption of Lessor from Liability. Lessor shall not be liable tor injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employeea, contractors, invitees, customers, or any other per$on in or about Ihe Premises, whether such damage or injury is caused by
or results from fire, steam, electricity, gas, water or rain, 0( from the breakage, leakage, obstruction or other defects of pipes, tire sprinklers, wires, appliances,
plumbing, HVAC or lighting fixtures, or from any other cause, whether the said Injury or damage results from conditions arising upon the Premises or upon other
portions of the Building. or from olher source, or places. Lessor shall not be ltable for any damages arising from any act or neglect of any other tenant of Lessor nOf
from the railure of Lessor to enforce the provisions of any other lease in the Project. Not'oNithslanding Lessor's negligence or breach of this Lease, Lessor shall under
no circumslances be liable for Injury to Lessee's business or ror any loss of income or profit therefrom
9. Damage or Destruction.
9_ t Definitions.
(a) NPremises Pa,tf,al Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations
,and Utility Installations. which can reasonably be repaired in 3 months or less rrom the dale of the damage or destruction, and the cost thereof does not exceed a
sum equal to 6 month's Base Ren!. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to 'Nhether or nol the damage
is Partial or Total.
(b) "Premises Total CestructionM shall mean damage or destruction to the improvements on the Premises, olher than lessee Owned
Alterations and Utility Installalions and Trade Fixtures, which cannot reasonabty be repaired in 3 months or less from the date 01 the damage or destruction a.ndJor the
cost thereof exceeds a sum equal to 6 month's Sase Rent. Lessor shall notify Lessee in writing within 30 days from the dale of the damage or destruCtIon is to
whether or not the damage is Partial or Total. ..
(c) ~Insured Los.s~ shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures. lNhich was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective or any deductible
amounts 0 coverage limits invotved
i.
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~.;l. Partial Damage . Insured Loss. If a Premises Partial Ofitnage that is en IMured lOSS oCCurs, men L.e5SOf snlilll, ill ~. -.-,_.., .....-..
,.....,nage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon 8S reasonably possible and this Lease shall continue in
,orce and effect; provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or destruction the total cost to repair of which is
AOOO or less, and, in such event. Lessor shall make any applicabte insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstandlng the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall
promptly contribute the shortage in proceeds 8S and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by
reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover
same, or adequate assurance thereof, within 10 days following receijX of written notice of such shortage and request therefor. If Lessor receiveS said funds or
adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this
Lease shall remain in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days
thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain
in full force and effect, or (ii) have this lease terminate 30 days thereafter. lessee shall not be entitled to reimbursement of any funds contributed by Lessee to
repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be
some Insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.
9.3 Partial Damage. Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful
act of Lessee (in v./htch event Lessee shall make the repairs at Lessee's expense), lessor may either: 0) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) terminate this lease by gMng written notice to Lessee within 30 days after
receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice. In the event lessor
elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's
commjtment to pay for the repair of such damage without reimbursement from lessor. Lessee shall provide Lessor with saki funds or satisfactory assurance thereof
within 30 days after making such commitment. In such event this lease shall continue in full force and effect, and Lessor shall proceed to make such repairs as
soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date
specified in the termination notice.
9.4 Total Destruction. Notwithstanding any other provision hereof, If a Premises Total Destruction occurs. this Lease shall terminate 60 days
following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, lessor shall have the right to recover
lessor's damages from Lessee, except as provided in Paragraph 8.6.
9.5 Damage Near End of Tenn. If at any time during the last 6 months of tHis Lease there is damage for which the cost to repair exceeds one
month's Base Rent, whether or not an Insured Loss, Lessor may terminate this lease effective eo days following the date of occurrence of such damage by giving a
written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the foregoing, If lessee at that time has an
exercisable option to extend this lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such option and (b) providing lessor
with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is 10 days after
lessee's receipt of lessor's written notice purporting to terminate this lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises
such option during such period and provides lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shaU, at
lessor's commercially reasonable expense, repair such damage as soon as reasonably possible and this lease shall continue in full force and effect. If lessee faits
to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and
Lessee's option shall be extinguished.
9.6 Abatement of Rent; Lessee's Remedies.
(a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous substance Condition for which Lessee
is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which lessee's use of the Premises is impaired, but not to exceed the proceeds received from the Rental Value insurance. All other
obligations of Lessee hereunder shall be performed by lessee, and Lessor shall have no liability for any such damage, destruction, remetUation, repair or restoration
except as provided herein.
(b) Remedies. If lessor shall be obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way,
such repair or restoration within 90 days after such obligation shall accrue, lessee may, at any time prior to the commencement of such repair or restoration, give
wtitten notice to Lessor and to any lenders of which Lessee has actual notice, of Lessee's e~on to terminate this Lease on a date not ~ than 60 days follOYling
the gMng of such notice. If Lessee gives such notice and such repair or restoration is not commencecl within 30 days thereafter, this Lease shall tenninate as of the
date specified in said notice. If the repair or restoration is commenced within such 30 days, this Lease shall continue in full force and effect. ~Commence" shall
mean ejther the unconditional authorization of the preparation of the required plans. or the beginning of the actual work on the Premises, whichever first occurs.
9.7 Termination; Advance Payments. Upon termination of this lease pursuant to Paragraph 6.2(g) or Paragraph g, an equitable adjustment
shall be made concerning advance Base Rent and any other advance payments made by Lessee to lessor. lessor shall, in addition, return to Lessee so much of
Lessee's Security Oeposjt as has not been, or is not then required to be, used by Lessor.
9.8 Waive Salutes. Lessor and Lessee agree that the terms of this Lease shall govern the effect of any damage to or destruction of the Premises
with respect to the termination of this lease and hereby waive the provisions of any present or future statute to the extent inconsistent herewith.
10. Real Property Taxes.
10.1 Definitions. As used herein, the term "Real Property Taxes" shall include any form of assessment real estate. general, special, ordinary or
extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; andlor license fee Imposed upon or ~vied against any
legal or equitable interest of Lessor in the Project, Lessor's right to other income therefrom, and/or lessor's business of leasing, by any authority having the direct or
indirect power to tax and where the funds are generated with reference to the Project address and where the proceeds SO generated are to be applied by the city,
county or other local taxing authority of a jurisdiction within which the Project is located. -Real Property Tues" shall also include any tax, fee, tevy, assessment or
charge, or any increase therein, imposed by reason of events occurring during the term of this lease, including but not limited to, a change in the O\YI1ership of the
Project or any portion thereof or a change in the improvements thereon.
10.2 Payment of Taxes. Except as otherwise provided in Paragraph 10.3. Lessor shall pay the Real Property Taxes applicable to the Project, and
said payments shall be included In the calculation of Operating Expenses in accordance with the provisions of Paragraph 4.2.
10.3 Additional Improvements. Operating Expenses shall not include Real Property Taxes specified in the tax assessofs records and work
sheets as being caused by additional improvements placed upon the Project by other lessees or by Lessor for the exclusive enjoyment of such other lessees.
Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time Operating Expenses are payable under Paragraph 4.2, the entirety of any
increase in Real Property Taxes if assessed solely by reason of Atterations, Trade Fixtures or Utillly Installations placed upon the Premises by Lessee or at Lessee's
request.
10.4 Joint Assessment. If the Building is not separately assessed, Real Property Taxes allocated to the Building shall be an equitable proportion of
the Real Property Taxes for all of the land and improvements included within the tax parcel assessed. such proportion to be detennined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as may be reasonably available. Lessor's reasonable determination thereof, in good
faith, shall be conclusive.
10.5 Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed against and levied upon Lessee OWned Alterations and
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, . ,~s, T~de Fixtures, furnishings, equipment and all personal property of Lessee contained in the Premises. When possible, Lessee shall Cluse tts
. ~~tteratlons and Utility Installations, Trade Fixtures. furnishings, equipment and all other personal property to be assessed and billed separately from
~_~rty of Lessor. If an~ of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay lessor the taxes attributable to Lessee's
, r - within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property.
_ 1 Utilities and Services.
-1 . . 11.1 Services Provided by Lessor. Lessor shall provide heating, ventilation, air conditioning, reasonable amounts of electricity for normal lighting
and office machines, water for reasonable and normal drinking and lavatory use in connection with an office, and replacement Iigl'rt bulbs and/or fluorescent tubes
and ballasts for standard overhead fIXtures. Lessor shall also pravide janitorial services to the Premises and Common Areas 5 times per week, excluding Building
Holidays, or pursuant to the attached janitorial schedule, if any. Lessor shall not, however, be required to provide janitorial services to kitchens or storage areas
included wtthin the Premises.
11.2 Services Exclusive to Lessee. Lessee shall pay for all water, gas, heat, light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Premises or to Lessee, together with any taxes thereon. If a service is deleted by Paragraph 1.13 and such
seMce is not separately metered to the Premises, Lessee shall pay at lessor's option, either Lessee's Share or a reasonable proportion to be determined by Lessor
of all charges for such jointly metered service.
11.3 Hours of Service. Said services and utilities shall be provided during times set forth in Paragraph 1.12. Utilities and services required at other
times shall be subject to advance request and reimbursement by Lessee to Lessor of the cost thereof.
11.4 Excess Usage by Lessee. Lessee shall not make coMection to the utilities except by or through existing outlets and shall not install or use
machinery or equipment in or about the Premises that uses excess water, lighting or power, or suffer or permit any act that causes extra burden upon the utilities or
seMces, including but not limited to security and trash services, over standard office usage for the Project. Lessor shall require Lessee to reimburse Lessor for any
eXcess expenses or costs that may arise out of a breach of this subparagraph by Lessee. Lessor may, in its sole discretion, install at Lessee's expense supplemental
equipment andlor separate metering applicable to Lessee's excess usage or loading.
11.5 Interruptions. There shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control
or in cooperation with governmental request or directions.
12. Assignment and Sublelling.
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment") or sublet
all or any part of Lessee's interest in this Lease or in the Premises Yo1thout Lessor's prior written consent. .
(b) Unless lessee is a corporation and its stock is publicly traded on a national stock exchange, a change in the control of Lessee shall
constitute an assignment requiring consent The transfer, on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a change in control
for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition, financing, transfer,
leveraged buyout Of otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occurs, which results or will result in a
reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at the
time of the most recent assignment to which lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction,
whichever was or is greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Net Worth of Lessee" shall mean the net
worth of Lessee (excluding any guarantors) established under generally accepted accounting principles.
(d) An assignment or subletting without consent shall, at Lessor's option, be a Default curable after notice per Paragraph 13.1(c), or a
noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach,
Lessor may either: (i) terminate this Lease, or (it) upon 30 days written notice, increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in
the event of such Breach and rental adjustment, (i) the purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjusbnent
to 110% of the price previously in effect, and (ii) all fIXed and non.foced rental adjustments scheduled during the remainder of the Lease term shall be increased to
110% of the scheduled adjusted rent.
(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief.
12.2 Tenns and Conditions Applicable to Assignment and subletting.
(a) Regardless of Lessor's consent, no assignment or subletting shall: (i) be effective without the express written assumption by such assignee
or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment
of Rent or for the perfonnance of any other obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of
Lessor's right to exercise its remedies for Lessee's Defautt or Breach.
(c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.
(d) In the event of any Defautt or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for
the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor's remedies against any other person
or entity responsible therefore to lessor, or any securtty held by Lessor.
(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor's determination
as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but. not limited to the intended use andlor
required modification of the Premises, if any. lessee agrees to provide Lessor with such other or additional Information and/or documentation as may be reasonably
requested. (See also Paragraph 35)
(f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment or entering into such sublease, be deemed
to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee
during the term of said assignment or sublease, other than such obligaUo"s as are contrary to or inconsistent with provisions of an assignment or sublease to which
Lessor has specifically consented to in writing.
(g) Lesso(s consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by
this Lease unless such transfer is speciflCllily consented to by Lessor in writing. (See Paragraph 39.2)
12.3 AddKional Tenns and CondKions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of
aU or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressJy incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublea.., and Lessor may collect such
Rent and appty same toward Lessee's obligations under this Lease; provided, however, that until 8 Breach shall occur in the perfonnance of Lessee's obligations,
Lessee may collect said Rent. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed
liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee. Lessee hereby irrevocabiy authorizes and
directs any such sublessee, upon receipt of a wrttten notice from Lessor stating that a Breach exists in the performance of Lessee's obligations under this lease, to
pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rety upon any such notk;e from Lessor and shall pay all Rents to Lessor without
any obligation or light to inquire as to whether such Breach exists, notwithstanding any claim from Lessee to the contrary.
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I
,...} "' Un;: CVlIllnUI. ClIIIldlWII uy ~, L~' III.y. .lllaU!JUUlI, 'ttqUUe5U~ W.MUII1", &,.-...01,"'....'...."...........--... ...,-" ......--......
_ ~tlons of the subl~sor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall
~ Hero!e for any prepaId rents or security deposit paid by such sublessee to such sublessor or for any prior Defautts or Breaches of such sublessor.
/" (c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of lessor.
(d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by lessee to the sublessee, who shall have the right to cure the Default of
Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.
13. Default: Breach; Remedies.
13.1 Default; Breach. A "Default" is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules
and Regulations under this Lease. A "BreachM is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default
within any applicable grace peroo:
(a) The abandonment of the Premises; or the vacating of the Premises without providing a commercialty reasonable level of security, or where
the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize
potential vandalism.
(b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or
to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to furtill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of 3 business days following written notice to Lessee.
(c) The failure by Lessee to provide 0) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii)
the rescission of an unauthorized assignment or su~etting, (tv) an Estoppel Certificate, (v) a requested subordination, (vi) evidence concerning any guaranty and/or
Guarantor, (vii) any document requested under Paragraph 41 (easements), or (viii) any other documentation or infonnation which Lessor may reasonably require of
lessee under the terms of this lease, where any such failure continues for a period of 10 days following written notice to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adapted under Paragraph 2.8 hereof,
other than those described in subparagraphs 13.1(a), (b) or (c), above, where such Default continues for a period of 30 days after written notice; provided, however,
that if the nature of Lessee's Default is such that more than 30 days are reasonably required for its cure, then It shall not be deemed to be a Breach jf Lessee
commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "debtor" as defined in 11 U.S.C. S 101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed
within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially an of Lessee's assets located at the Premises or of Lessee's interest
in this lease, where possession is not restored to lessee within 30 days; or (iv) the attachment, execution or other judicial seiZure of substantially all of Lessee's
assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any
provision of this subparagraph (e) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of lessee or of any Guarantor given to Lessor was materially false.
(g) If the performance of Lessee's obligations under this Lease is guaranteed: 0) the death of a Guarantor, (ii) the termination of a Guarantor's
liability 'Nith respect to this Lease other than in accordance with the terms of such guaranty, (Iii) a Guarantor's becoming insolvent or the subject of a bankruptcy
filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of its guaranty obligation on an anticipatory basis, and Lessee's failure, within 60
days following written notice of any such event, to provide written ahemative assurance or security, which, when coupled with the then existing resources of Lessee,
equals or exceeds the combined financial resources of lessee and the Guarantors that existed at the time of execution of this Lease.
13.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency,
without notice), lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds,
insurance policies, or govemmentallicenses, permits or approvals. The costs and expenses of any such performance by Lessor shall be due and payable by lessee
upon receipt of invoice therefor. If any check given to Lessor by Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its option, may require all
future payments to be made by Lessee to be by cashie(s check. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting
Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this lease shall terminate and Lessee shall
immediately surrender possession to lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been eamed at the time of
termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds
the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent
for the balance of the term after the time of award exceeds the amount of such rental loss that the lessee proves could be reasonably avoided; and (w) any other
amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to resuft therefrom, including but not limited to the cost of recovering lXJSSession of the Premises, expenses of relerting,
including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in connection
with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within wh)ch the Premises are located at the
time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover damages
under Paragraph 12. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such
proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit. tf a notice
and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful
detainer statute shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful
detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful
detainer and a Breach of this Lease entitling lessor to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign,
subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not constitute
a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the laws or judk:ial decisions of the state wherein the Premises are located. The
expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of
this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture. Any agreement for free or abaled rent or other charges, or for the gMng or paying by Lessor to or for Lessee of any
cash or other bonus, inducement or consideration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement
Provisions", shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of
this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other
charge, bonus, inducement or consideration theretofore abated, given or paid by lessor under such an Inducement Provision shall be immediately due and payable
by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of
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.,r' 13.4 Late Charges. Lessee hereby acknowledges that tate payment by Lessee of Rent will cause lessor to incur costs not contemplated by this
...;e. the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late
'Gf,arges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by lessor within 5 days after such amount shall be due,
then, without any requirement for notice to Lessee, lessee shall pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $1 00, whichever
is. greater. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs lessor wm incur by reason of such late payment.
Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the
exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecutive
installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's optoo, become due and payable quarterly in
advance.
13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments
(such as Base Rent) or within 30 days following the date on which it was due for nonscheduled payment, shall bear interest from the date when due, as to scheduled
paym.nts, or the 31st day aft.r tt was due as to nonscheduled paym.nts. Th. int.rest f'lnt.resl") charged shall be computed at the rat. of 10% per annum but shall
not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late charge provided for in Paragraph 13.4.
13.6 Breach by Lessor.
(a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fai~ within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt by Lessor, and any
Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has not
been performed; provided, however, that if the nature of Lessor's obligation is such that more than 30 days are reasonably required for its performance, then Lessor
shall not be in breach if performance is commenced within such 30 day period and thereafter diligently pursued to completion.
(b) P.rformanc. by Lessee on Behall of L.ssor. In the .v.nt that n.tther Lessor nor L.nd.r cures said breach within 30 days aft.r receipt
of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and
offset from Rent the actual and re8Se.nable cost to perform such cure, provided however, that such offset shall not exceed an amount equal to the greater of one
month's Base Rent or the Security Deposit, reserving Lessee's right to seek reimbursement from Lessor. Lessee shall document the cost of said cure and supply
said documentation ~o Lessor.
14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said
power (collectively ".Condemnation"), this Lease shall terminate as to the part taken as of the date the conclemning authority takes title or possession, whichever first
occurs. If more than 10% of the rentable floor area of the Premises, or more than 25% of Lessee's Reserved Parking Spaces, if any, are taken by Condemnation,
Lessee may, at Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such
notice, within 10 days after the condemning authority shall have taken possession) terminate this lease as of the date the condemning authority takes such
possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain In full force and effect as to the portion of the
Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold,
the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation for Lessee's relocation expenses, loss of
business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and
Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shaH be entitled
to any and all compensation which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage
to the Premises caused by such Condemnation.
15. Brokerage Fees.
15.1 Additional Commission. In addition to the payments owed pursuant to Paragraph 1.10 above, and unless Lessor and the Brokers otherwise
agree in wrtting, Lessor agrees that: (a) If Lessee exercises any Option, (b) if Lessee acquires from Lessor any rights to the Premises or other premises O'W'l'led by
Lessor and located within the Project, (c) if Lessee remains in possession of the Premises, with the consent of Lessor, after the expiration of this Lease, or (d) if
Base Rent is increased, whether by agreement or operation of an escalabon clause herein, then, Lessor shall pay Brokers a fee in accordance with the schedule of
the Brokers in effect at the time of the execution of this Lease.
15.2 Assumption of Obligations. Any buyer or transferee of Lessor's interest in this Lease shall be deemed to have assumed Lessor's obligation
hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and
for brokerage fees pertaining to this Lease when due, then such amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee's Broker
when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice,
Lessee shall pay said monies to Its Broker and offset such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a third party beneficiary of any
commission agreement entered into by andlor between lessor and Lessor's Broker for the limned purpose of collecting any brokerage fee owed.
15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and WBlTilnt to the other that it has had no
dealings with any person, firm, broker or finder (other than the Brokers, jf any) in connection With this Lease, and that no one other than said namecl Brokers is
entitled to any commission or finder's fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless
from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or
actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably Incurred with respect thereto.
16. Estoppel Certificates.
(a) Each Party (as "Responding Party") shall within 10 days after written notice from the other Party (the "Requesting PartyM) execute,
acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current "Estoppel Certificate" form published by the
American Industrial Real Estate Association, plus such additional information, confirmation andlor statements as may be reasonably requested by the Requesting
Party.
(b) If the Responding Party shall fail to .xecut. or d.liv.r the Estoppel C.rtificot. within such 10 day period, the R.questing Party may execute
an Estoppel C.rtificat. stating that: 0) the Lea.. is in full force and .ffect without modificolion except as may be represented by the Requesting Party, (ii) th.r. are
no uncured defaults in the Requesting Perty's performance, and (iii) ~ Lessor is the Requesting Party, not more than on. month's rent has been paid in advance.
Prospective purcha..rs and .ncumbrancers m.y rely upon the R.questing Party's Estoppel Certificat., and the Responding Party shall be estopped from denying
the truth of the facts contained in said C.rtifx:at..
(c) If lessor desires to finance, refinance, or sell the Premises, or any part thereof, lessee and all Guarantors shall deliver to any potential
lender or purchaser designated by Lessor such financial statements 85 may be reasonably required by such lender or purchaser, including but not limited to Lessee's
financial statem.nts for the past 3 years. All such financial stat.m.nts shall be received by Lessor .nd such lender or purcha..r in confidence and shall be used
only for the purposes herein ..t forth.
17. Definition 01 Lessor. The t.rm "Lesso(' as used h.rein shall mean the own.r or own.rs at the time in question ofth. fee Iille 10 the Premises, or, if this
is a subl...., of the Lessee's inter.st in the prior I..... In the event of a transf.r of Lesso(s tili. or int.rest in the Pr.mises or this Lea.., Lessor shall deliv.r to the
lransf.ree or assignee (in cosh or by credtt) any unused Security D.postt h.ld by Lessor. Exc.pt as provided in Paragraph 15, upon such transfer or .ssigrvn.nt
and delivery of the Security Deposrt, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease
th.reaft.~r to be performed by the L.ssor. Subject to the foregoing, the oblig.tions and/or covenants in this Leas. to be performed by the Lessor shall be binding only
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_eSsor as hereinabove defined.
~ . Severability. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any
...d'er provision hereof.
19. Days. Unless otherwise specifically indicated to the contnlry, the word "days" as used in this Lease shall mean and refer to calendar days.
20, Limitation on Uability. The obligilltions of Lessor under this Lease shall not constitute personal Obligations of Lessor or its partners, members, directors,
officers or shareholders, and Lessee shall look to the Project, and to no other .assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease,
and shall not seek recourse against Lessor's partners, members, directors, offICers or shareholders, or any of their personal assets for such satisfaction.
21. Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties With respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that
n hes made, and is relying solely upon, ns own Investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as 10
the use, nature, quality and character of the Premises. Brokers have no responsibility wnh respect thereto or ,.,;th respect to any defaun or breach hereof by etther
Party. The liability (including court costs and attorneys' fees) of any Broker with respect 10 negotiation, execution, delivery or performance by enher Lessor or Lessee
under this Lease or any amendment or modifICation hereto shall be limited to an amount up to the fee received by such Broker pursuant to this Lease: provided,
however, that the foregoing Iimnation on each Broke~s liability shall not be applicable to any gross negligence or ,.,;lIful misconduct of such Broker.
23. Notices.
23.1 Notice Requirements. All notices required or permllled by this Lease or applicable law shall be In wrfIing and may be delivered in person (by hand
or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mall, vmh postage prepaid, or by facsimile transmission, and shall
be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to 8 Party's signature on this Lease shall be that
Party's address for delivery or mailing of notices. Either Party may by wrttten notice to the other specify a different address for notice, eKcept that upon Lessee's
taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to Lessor shall be concurrently transmitted to
such party or parties at such addresses as Lessor may from time to time hereafter designate in writing,
23.2 Date of Notice. Any notice sent by registered or certified mail, retum receipt requested, shall be deemed given on the date of delivery shown on the
receipt card, or If no delivery date is shown, the postmark thereon. If sent by regular mall the notice shall be deemed grven 48 hours after the same is addressed as
required herein and mailed vmh poslage prepaid. Notices delivered by United Stales Express Mail or overnight courier thet guarantee next day delivery shall be
deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed
delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mall. If notice is
received on a Saturday, Sunday or legal holiday, n shall be deemed received on the next business day.
24. Waivers. No waiver by lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof. Lessor's consent to,
or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be
construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. The acceptance of Rent by lessor shall not be a
waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notWithstanding any
qualifying statements or conditions made by Lessee in connection therewith, which such. statements and/or conditions shall be of no force or effect whatsoever
unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.
25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.
(a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor or Lessee should from the
outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge being
advised by the Brokers in this transaction, as follows:
(i) Lessor's Aoent. A Lessor's agent under a listing agreement with the lessor acts as the agent for the Lessor only. A
Lessor's agent or subagent has the fallowing affirmative obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the
lessor. To the I .ccee end the Lessor: 8. Diligent exercise of reasonable skills and care in performance of the agenfs duties. b. A duty of honest and fair dealing
and good tanh. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or wtthin the diligent
attention and observation of, the Parties. An agent is not obligated to reveal to etther Party any confidential information obtained from the other Party which does not
involve the affirmative duties set forth above.
(ii) Lessee's Aoent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not the Lessor's
agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor. An agent acting only for a Lessee
has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the lessee
and the Lessor' a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty
to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation
of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative
duties set forth above.
(iii) Aaent ReDresentina Both Lessor and Lessee. A real estate agent, either acting directly or through one or more associate
licenses, can legally be the agent of both the lessor and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee. In
a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: a. A fiduciary duty of utmost care, Integrity, honesty and
loyalty in the dealings with either Lesser or the Lessee. b. other duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (il). In representing both
Lessor and Lessee, the agent may not without the express permission of the respective Party, disclose 10 the other Party thatlhe Lessor will accept rent in an amount
less than that indicated in the listing or that the Lessee is willing to pay a higher rent than that offered:. The above duties of the agent in a real estate transaction do
not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and Lessee shouid carefully read all agreements 10 assure that they
adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advise is desired.
consult a competent professional.
(b) Brokers have no responsibility wtth respect to any defaun or breach hereof by enher Party. The liability (including court costs and
attorneys' fees), of any Broker with respect to any breach of duty, error or omission relating to this Lease shall not exceed the fee received by such Broker pursuant to
this Lease; provided, however, that the loregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such
Broker.
(c) Buyer and Seller agree to identify to Brokers as "Conftdentiaf' any communication or information given Brokers that is considered by
such Party to be confidential.
26. No Right To Holdover. Lessee has no right to relain possession of the Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds OVlll', then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the expiration or termination.
Nothing contained herein shaU be construed as consent by Lessor 10 any holding over by Lessee.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever posslbie, be cumuiative with all other remedies
at law or in equity.
28, Covenants and Conditions; Construdion of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever
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Nothjng contained herein shall be eonstnJed as consent by Lessor to any holding over by lessee.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shalt, wherever possible, be cumulative with all other remedies
at law or in equity.
28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are: both COVenants and
conditions In construing this lease. all headings and titles are rot the convenience or the Parties only and shall not be considered a part of this Lease. Whenever
required by the context, the singular shall include the pI..,..1 and vice versa. This lease shall not be construed as if prepared by one of the Panies, but rather
according 10 its fair meaning as I whole. as if both Parties had prepared it.
29. Binding Errect; Choice of L.aw This Lease shall be binding upon the Parties, Iheir personal representatives, successors and assigns and be governed
by the laws of the State in wl"jch tne Premises are loCated. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are Ioc:ated.
30. Subordination: Attornment; Non.Disturbance.
30.1 Subordin~tion, This Lease and any Option granted hereby shall be subject and subordinate to any ground lease. mortgage, deed of trust. or
other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to .ny and all advances made on the security
thereof. and to all renewals, modifICations, and extensions thereof. Lessee agrees that the hold.rs of any such Security Devices (in this Lase together ...f.rred to as
~Lender'1 shall have no liability or obligation to perform al"lY of the obflSJations of Lessor under this Lease. Any Lender may elect to have this Lease and/or any Option
gnmted hereby superior to the fie" of its Security Device by giving written notic:e thereof to Lessee, whereupon this Lease and such Options shilll be deemed prior to
such Security Device, notwithstanding the relalive dates of the documentation or recordalion thereof.
30.2 Attornment. In the event that Lessor tl1IO$fers IiUe to the Premises, or the Premises are acquired by another upon the forec:IO$ure or
termination of a Security Device to which this lease is subordinated (I) lessee shall, subject 10 the nondisturbance provisions of par.graph 30.3. attorn to aueh new
owner, and upon request, enter into a new lease, containing all of the terms and provisions of this Lease, v.ith such new owner fOf the remainder of the term hereof,
or, at the election of such new owner, lhi$ Lease shill automatically become a new Lease between Lessee and such new owner, upon III 01 the terms and conditions
hereof, for the remainder of the term hereof, and (ii) Lessor shan lhereaner be relieved of any further obligations hereunder and such new owner shall assume all of
Lesso(s obligations hereunder. exc:eplthat such new owner shall not (a) be liable for any act OC' omission of any prior lessor or with respect to events occurring pnor
to acquisitIOn of ownership; (b) be subject to any offsets Of defenses which lessee might have against any'priot lessor, (c) be bound by prepayment of mere th.n
one month's rent, or (d) be liable for the return of any security deposit paid to any prior lessor. ,
30.3 Non.oisturbance. With r"peelto Security Devices entered into by Le'SSOr' aner the execution of this Lease, LlSsee's subordination of this
Lease shall be subject to receMng a commercially reasonable non..ctisturbaoce agreement (a "Non.[)lsturbance Agreemenr) from the Lender which
N.on.Oisturbance Agreement provides that Less..'s possession of the Premises, and this Lease, including any options to extend the tenn hereof, will not be
dIsturbed so long as Lessee is not in Breach hereof and attorn! to the record owner of Ihe Premises. Further, within 60 days after the execution of this Lease,
Lessor shall use its commerl:ially reasonable efforts to obtain a Non.Oisturbance Agreement from the holder of any pre-exisling Security Device which is secured by
the f'remises. In the event that Lessor is unable to provide the Non.Disturbance Agreement within said 60 days, then Lessee may, at Lessee's option, directly
contact Lender and attempt to n.gotiate for the execution and delivery 01 a Non.Oisturbance Agreement.
30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be effective wilhoot the execution of any further documents; provided,
however, that. upon written request from Lessor or a Lender in conneclion with a sale, financing or refinancing of the Premises. Lessee and lessor shall execute
such further writings as may be reasonably required to separately document any subordination, attornment andlor Non--Oisturbance Agreement provided for herein.
~1. Attorneys' Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare
rights herel6lder, the Prevailing Party (as hereart" defined) in any such proceeding. action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such
~ees m~~ be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The lerm,
Prevailing Party~ shall inc~ud., without limitation, a Party or Broker who substantially obtains 01 defeats the relief sought, as the case may be, whether by
compromise, settlement, judGment, Of the abandonmenl by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in
accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably inculTed. Arror"'j::Y~' Fj::j::~ SHAll lNCI (lOP: A
W-fAfA "orfl~N ~F f~C' "rmrN"j:Y !;AtArY AND j::)/"FN~P:~ lNCIIUFD aY..rWF ~AN ftUNArDlN~ CITY .J"TrOrN'EY"S ~FFlr.F IF' SAID OF'F1CF- IS INVOIVFD IN
BIFOrC1NG rH'~ lEASE ON P'lI=HAtF OF nil: I F~~FF.. In addition, Lessor shall be entitled to attorneys' tees, costs and expenses incurred in the preparation and
service of notIces of Default and consultations in connection therewith, whether or not a I~a! action is subsequently commenced in connection with such Default or
resulllng areach ($200 is a rli.sonable minimum per occurrence tor such services and consultation).
32. Lessor's Access; Showing Premises; Repairs. Lessor and lesso(s agents shall have Ihe right to enter the Premises at any time, in !he case of an
emergency, and otherNis. at reasonable times for the purpose of showing the same to prospective purchasers, lenders, or lenants, and making suc:h alterations,
repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes
and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee's use of the Premises. All such activities shall be
WIthout abatement of rent or liability to Lessee, LI!$.SO( may at any time pJace on the Premises any Ol"dinary ~For Sale~ signs and LessOf may during the last 6
months of the term hereof place on the Premises any ordinary ~For Lease~ signs. In addition, Lessor shall have the right to retain keys to the Premises and to
unlock: all doors in or upon tM. PremisllS other than to files, vaults and safes, and in the cas. of emergency to enter the Premises by any reasona~ appropriate
means, and any such entl)' shatll"lot be deemed a forcible or unlawful entry or detainer of the Premises or an eviction. Lessee waives any charges for damages or
injuries or interference with l.es.s.ee's property or business in connection therewith,
33, Auctions. Lessee shall not conduct. nor permilto be conducled, any auction upon the Premises 'Nithout Lessor's prior vnitten consent. Lessor shaU not
be obligated to exercise any standard of reasonableness in determining whether to permit an auc:tion.
34. Signs, Lessee shall not place any sign upon the Project without Lessar's prior written consent.
35. Termination: Merger. Unless specifleally stated otherwise in writing by Lessor, the volunlary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach by Les.see, shall automatically terminate any sublease or lesser estate in the
Premises, provided, however, that Lessor may elect to continue anyone or all existing subtenancies. Lessor's failure within 10 da~ following any such event to elect
to the contrary by W1'itten notice to the holder of any such lesser interest, shalt constitute Lessor's election to have such event constitute the termination of such
interest.
36. Consents. Except as otherwise prOVIded herein, wherever in this Lease the consent ot a Party is required to an act by or for the other Party, such consent
shall not be unreasonably wifhheld or delayed. Lesso(s actual reasonable costs and expenses (including but not limited to architects', attorneys', engineers' and
other consultants' fees) incurred in the consideration of, or response 10, a request by Lessee for any Lessor consent, including but not limited to consents to an
assignment, a subletting or the presence or use of a Hazardous Substance. shalt be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor's consent to any act, assignment 01' subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this lease exists, nor
shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such
consent. TI".e failure 10 specify herein any partk:ular condition to Lesso(s consent shall net preclude the imposition by Lessor at the time of consent of such ~urther
or other conditions as are then reasonable with reference to the particular matter for which consent is beIng given. In the event that either Party disagrees '<<ith any
determination made by the other hereunder and reasonably requests lhe reasons for such determination, the determining party shall furnish its reasons in writ:ng and
in reason ble detail 'NitMin 10 business days following such request.
GUilrilntor
37.1 Execution. The Cuarantors, if any, shall each execute a guaranty in the form most rtCently published by the American Induslrial Rul Estate
L.
Inilials
Initials
<C 1'99 ~ Arnerie..n Indus1ri~1 Real Estate Association
Page130f15
REVISED
FORM OFG.,..IUE
,'#"d ~ormed under .this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof.
oJ options. If Lessee IS granted an Option, as defined below, then the following provisions shall apply.
. 39.1 Definition. "Option~ shall mean: (a) the right to extend the term of or renew this lease or to extend or renew any lease that Lessee has on
".;.r property of Lessor; (b) the right of first refusal or first offer to lease etther the Premises or other property of Lessor, (c) the right to purchase or the right of first
retuS31 to purchase the Premises or other property of Lessor.
. 39.2 Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original lessee, and cannot be
a~igned or exer:c~ by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if requested by Lessor,
with Lessee certifying that Lessee has no intention of thereafter assigning or subletting.
39.3 Multiple Options. In the event that Lessee has any muttiple Options to extend or renew this Lease, a later Option cannot be exercised unless
the prior Options have been validly exercised.
39.4 Effect of DefauK on Options,
(a) Lessee shall have no right to exercise an Option: (i) during the period commencing with the giving of any notice of Default and continuing
until said Defaull is cured, (ii) during the period of time any Rent is unpaid (without regard to whether nolieethereof is given L.....), ~ii) during the time Lessee is in
Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Oefautt, whether or not the Defaults are cured, during the 12
month period immediately preceding the exercise of the Option, .
(b) The period of time within which an Option may be exerci.ed shall not be extended or enlarged by reason of Lessee's inabillly to exercise an
Option because of the provisions of Paragraph 39,4(a),
(c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee's due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent
becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a Breach of this Lease.
40. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its
agents and invitees and their property from the acts of third parties, In the event, however, that Lessor should elect to provide secll'ity services, then the cost theneof
shall be an Operating Expense,
41. Reservations.
(a) Lessor reserves the right: (i) to grant, without the consent or joinder of Les..., such easements, rights and dedication. that Lessor deem.
necessary, (ii) to cause the recordation of parcel maps and restrictions, (iii) to create and/or install new utility raceways, so long as such easements, rights,
dedications, maps, restrictions, and utility raceways do not unreasonably interfere with the use of the Premises by Lessee. Lessor may also: change the name,
address or lttle of the Building or Project upon at Iea.t 90 days prior _en notice; provide and inslail, at Lessee's expense, Building standard graphics on the door of
the Premises and such portions of the Common Areas as lessor shall reasonably deem appropriate; grant to any lessee the exclusive right to conduct any business
as long as such exclusive right does not conflict with any rights expressly given herein: and to place such signs, notices or displays as Lessor reasonably deems
necessary or advisable upon the roof, exterior of the Building or the Project or on pole signs in the Common Areas. lessee agrees to sign any documents reasonably
requested by lessor to effectuate such rights. The obstruction of (essee's view, air, or light by any structure erected in the vicinity of the Building, whether by Lessor
or third parties, shall in no way affect this Lease or impose any liability upon Lessor.
(b) Lessor also reserves the right to move lessee to other space of comparable size in the Building or Project. Lessor must provide at least 45
prior Mitten notice of such move, and the new space must contain improvements of comparable quality to those contained within the Premises. lessor shall pay the
reasonable out of pocket costs that lessee incurs with regard to such relocation, including the expenses of moving and necessary stationary revision costs. in no
event, however, shall Lessor be required to pay an amount in excess of two months Base Rent. Lessee may not be relocated more than once during the term of this
Lease.
(c) Lessee shall not: (i) use a representation (photographic or otherwise) of the Building or Project or their name(s) in connection with lessee's
business; or (ii) suffer or permit anyone, except in emergency, to go upon the roof of the Building.
42. Perfonnance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment "under protesr and such payment shall
not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that
there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it
was not legally required to pay,
43. Authority,
(a) If e~her Party hereto is a corporation, trust, Iimlled liability company, partnership, or similar entity, each individual executing this Lea.e on
behalf of such entity represents and warrants that he or she is duty authorized to execute and deliver this Lease on its behalf. Each party shall, within 30 days after
request, deliver 10 lhe other party satisfactory evidence of such authority,
(b) If this Lease is executed by more than one person or entity es "Lessee", each such person or entity shall be jointly and severally liable
hereunder. It is agreed that anyone of the named Lessees shall be empowered to execute any amendment to this lease, or other document ancillary thereto and
bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such document.
44. Conflict, Any conflict between the printed provisions of this Lease and the typewritten or handwrillen provisions shell be controlled by the typewritten or
handwritten provisions.
45. Offer. Preparation of this Lease by either party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other
Party, This Lease I. not intended to be binding untii executed and delivered by all Parties hereto,
46, Amen_, This Lease may be modified only in writing, signed by the Parties in interest at the time of the modifICation, As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such reasonabJe nonmonetary mociflCiltions to thts Lease as may be reasonably required
by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.
47. Multiple Parties. If more than one person or entity is named herein as either Lessor or lessee, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease,
46, Waive, of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
INVOLVING THE PROPERTY OR ARISING OUT OF TitS AGREEMENT.
49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and/or the Arbitration of all disputes between the Parties andlor Brokers
arisingoutoflhisLease 0 is6!l is not aftachedtothisLeese,
SO, Americans with Disabllllies Act, In the event that as a resull of Lessee'. u.e, or intended use, of the Premises the American. with Disabiltties Act or
any similar law requires modifications or the construction or installation of improvements in or to the Premises, Building, project and/or Common Areas, the Parties
agree that such modifICations, construction or improvements shall be made at: 0 Lessof. expense 6!1 L.....'. expense,
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE
EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO, THE PARTIES HEREBY AGREE THAT, AT THE TIME
THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF
,
Initial.
Initials
Cll999 "American Industrial Real Estate Association
Page 140115
REVISED
FORM OFG-l-8/1tE
THIS LEASE,'IS ElCECUTED, THE TERMS'OF THIS LEASE,ARE COMMERCIALLY REASONABLEA/<ID EFFECTUATE THE INTENT AND PURPOSE OF
LESSOR AND LESSEE WITH RESFiec:TTO THE PREMISES. ' ' , "
ATTENTIoN, NO ~PRE$ENT ATION oR R!';COMME"lO/iTION IS MADE BY THE AMERlcA/illNDUSTRIAL REAl. ESTATE As$OCIATION OR BY /\NY
BROKER AS TO THE LEGAL SUFFlCISNCY,LEGAI. EFFECT, oR TAX CONSEQUENCES OF THIS i:EAse OR THE TRANsAcTION TO WHICH IT
RELATES. THEPltJIT1ES}llIIE URGED TO:
1, SEEK ADVICE OF COUNSELAS TO l:HEU!GALAND1"AX CONSEQUENCES OF THI!! LEASE"
2. RETAIN I\PPROPRIATi! CONsuLTANTS TO REVIEW' AND INVESTJGiATE THECONDlTlON OF THE PREMISES SAID INVESTIGATION
SHOULDINCLUDESUT NOT BE UMITEO, TO: THE POSSIBLE PRESENcE OF HAzARDOUS SUBSTANCes. THE ZONING AND SIt!: OF THE
PREMISES, THE STRUCTURAl. INTEGRITY, THE CONDITION CIF THE ROOF ,AN!)' OPEAATING'SYSTEMS. COMP\.IANCEWITH THE AMERICANS
,WITH IlISI\BILlTlES ACT AKD THE SUITABILITY OF'THE PileMlSES FOR LESSEE'S iNTENDED UsE: '
WARNING:, IF THE PREMISES 'ARE LOCATED:IN A STATE OTHERTHA/<I CAUFORNIA. (:l:RTAlN PROVISIONS OF THE LEASE MAY NEED TO BE
REiIISED TOCOMPlYWiTH TIlE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED. '
Th. port!o$b..io hOvo~1llIS LeOs..I"'" p8c8 Ond on 111. lIIi_ ipodried _1liOIr respoidJv. signit!K..,
Exoculod ot; SAN BERNARDINO'
Executodot; SAN BERNARDINO'
"":
en:
By LESSOR:
NEWIlOPE MISSIONARY BAPTIST CHURCH,
A CALIFORNIA NON-PROFIT CORPORATION
By LESSEE:
Library Board of Trustees
- -- J
By.
Norrie Pdn'*l: BREON WATEIlS
Till.: CHAIRMAN OT THE BOARD OF TRUSTEES
By.
Nome Pdntod:
nOe:
By.
N_ PdnlOd:
TdIo:
Addren: 1575 WEST i1TH STREET
SAN, SERNARD1ND, CA ~2411
"
By.'
Nome Pdnled:
T_
Address:
(909) 667-2526 I (909) B67-5406 mllo
Telepbono I FlCsimlle
F._ID JIIe. 95-2510795
TeIeilbcno I. Fa._.
FederIIlD No.
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1'011"1'5";15:
REVISED
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FORII 0fG.1_
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